EXHIBIT 99.1
------------
WESTERN POWER & EQUIPMENT CLOSES NEW
$32 MILLION SENIOR FINANCING FACILITY
Vancouver, Washington--June 9, 2005--Western Power & Equipment Corp.
(OTCBB: WPEC), a vertically integrated provider of construction and industrial
equipment and building materials, today announced that it has achieved a major
step in its strategic plan to broaden its business base and improve its balance
sheet through the closing of a new $32 million senior credit facility from
several institutional lenders. The facility is comprised of $30 million of
convertible debt (convertible into common shares of the Company at $2.00 per
share) and a $2 million term loan, both at a variable rate of LIBOR plus 6%. The
lenders were also granted warrants to purchase approximately 8.5 million common
shares of the Company at $1.75 per share.
Western used a significant portion of the loan proceeds to repay and
terminate its credit facility and forbearance agreement with GE Commercial
Distribution Finance Corporation and the remainder of the proceeds will be used
to support its near term needs for working capital, general capital
expenditures, including sufficient working capital to initiate the build out of
the Phoenix mining facilities, and other corporate requirements.
"We have all put a great deal of effort into finding the right
financial partner. We believe that we now have a lender that will support our
business model going forward. Our sincere thanks go out to all of the financial
institutions who worked with us through this process." said Dean McLain,
Western's president and chief executive officer.
Western returned to profitability in its fiscal year ending July 31,
2003 and continued its turnaround with net income of $1.9 million for its fiscal
year ended July 31, 2004 (a 364% increase in net income over the previous fiscal
year). Western reported year-to-date net income of $636,000 for the first two
quarters of its current fiscal year (ending January 31, 2005).
ABOUT WESTERN POWER & EQUIPMENT CORP.
Western Power & Equipment Corp. sells, leases, rents, and services
construction and industrial equipment for Case Corporation and over 30 other
manufacturers. The company currently operates 14 facilities in Washington,
Oregon, Nevada, California, and
Alaska. Western is publicly traded on the NASDAQ Over The Counter Bulletin Board
(OTCBB). For more information, please contact the company at 6407-B N.E. 117th
Avenue, Vancouver, WA 98662; telephone, 360-253-2346; fax, 360-253-4830; email:
webmaster@westernpower.com; or visit the company's web site http://www.wpec.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information contained herein relating to projected revenues, growth, income,
potential costs savings, and future results and events constitute
forward-looking statements. Actual results may differ materially from the
forward-looking statements because of a number of risks and uncertainties,
including but not limited to fluctuation in the construction and industrial
sectors and general economic cycles; the success of the Company's entry into new
markets; the success of the Company's operation of the acquired business;
industry conditions and competitors; competitive pricing; the Company's
relationship with suppliers; relations with the Company's employees; the
Company's ability to manage its operating costs and to integrate the acquired
businesses in an effective manner; the continued availability of financing;
governmental regulations and environmental matters; and risks associated with
regional, national, and world economies. Any forward-looking statements should
be considered in light of these factors.
# # #
PRESS, SHAREHOLDER, AND INVESTOR INQUIRIES:
Mark J. Wright
Vice President of Finance & Chief Financial Officer
Western Power & Equipment Corp.
(360) 253-2346
Richard Cooper
Strategic Growth International, Inc.
(212) 838-1444 E-mail: rcooper@sgi-ir-com